Union Finance Minister Nirmala Sitharaman on Monday said that the government is closely monitoring gold prices, noting that the yellow metal traditionally sees seasonal spikes during festival periods but has not crossed “certain limits.”
Addressing a press conference, post its customary post-Budget meeting with Central Board of Directors of the RBI, the Finance Minister said, gold is always an investment for households, seen seasonal spikes during the festival season. “We are watching it, but not seeing that prices are gone beyond certain limit.”
“All gold which comes off the market is imported. In this country, the dependence on precious metals is very much from outside only…We don’t have our own source of exploring and extracting gold. Steps are being taken, but not sufficient to meet our demand. Gold has always been a favoured investment for households…The high-pitched demand for domestic consumption also sees a seasonal spike during festival season.”
“We are watching it, but I’m not sure it has reached such alarming proportions…I think it has not gone beyond a certain limit. But of course, RBI will also be monitoring it…Most countries today, particularly their central banks, are buying gold and silver and storing them.”
She said, “It’s a tendency when you talk of Indian consumer market, Indian households, every central bank has some, but of late, you notice that many of the central banks outside are also buying gold…Now the spike is largely due to central banks also buying and storing. For our domestic consumption, which is a usual thing which happens every season, every festival, every household purchase is affected because of the global increase in gold and silver prices, which are much beyond the usual increases and fluctuations which happen in the gold and silver market….”
Reserve Bank of India (RBI) Governor Sanjay Malhotra said the order value of the gold import didn’t increase in the recent times despite increase in prices.
Sitharaman on US tariff-related developments
Commenting on the US tariff issue, Sitharaman said that the Ministry of Commerce and Industry is reviewing the situation. “It is early to comment,” she added.
Echoing with the Finance Minister, the RBI Governor on liquidity said, “We stand committed to providing liquidity for the productive needs of our economy.”
On the gross Foreign Direct Investment (FDI), he said the FDI has been very robust. “Even this year, good growth rate last year, also this year, also, we have sufficient reserves.”
Union Finance Minister held the customary post-Budget meeting with the Central Board of Directors of the RBI along with the Union Minister of State for Finance Pankaj Chaudhary and Sanjay Malhotra, Governor of RBI.
